Secure Property Development & Invest : – Annual Report and Accounts 2015

d24685e4-3d89-46c7-a759-cd08282c04b3.pdf ANNUAL REPORT‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌ 2015 Table of Contents

SECTION A- Annual Report

1. Letter to the Shareholders 4

2. Management Report 6

3. Corporate Overview & Financial Performance 6

4. Property Holdings 8

5. Financial and Risk Management 13

6. 2016 and beyond 14

7. Regional Economic Developments 15

8. Real Estate Market Developments 18

9. Romania 18

10. Bulgaria 20

11. Ukraine 21

12. Greece 22

13. Property Assets 23

14. Terminal Brovary Logistic Park , Ukraine 23

15. Innovations Logistics Park, Romania 23

16. EOS Business Park - Danone headquarters, Romania 24

17. Praktiker Retail Center, Romania 24

18. Delenco office building, Romania 25

19. Autounion office building, Bulgaria 25

20. GED Logistics center, Athens Greece 25

21. Residential portfolio 26

    • Romfelt Plaza (Doamna Ghica), Bucharest, Romania 26

    • Linda Residence, Bucharest, Romania 26

    • Monaco Towers, Bucharest, Romania 27

    • Blooming House, Bucharest, Romania 27

    • Green Lake, Bucharest, Romania 27

    • Boyana Residence, Sofia, Bulgaria 28

22. Land Assets 28

    • Aisi Bela - Bela Logistic Center, Odessa, Ukraine 28

    • Kiyanovskiy Lane - Kiev, Ukraine 28

    • Tsymlyanskiy Lane - Kiev, Ukraine 28

    • Balabino- Zaporozhye, Ukraine 29

    • Rozny Lane - Kiev Oblast, Kiev, Ukraine 29

    • Delia Lebada, Romania 29

23. SECTION B- Financial Statements

    SECURE PROPERTY DEVELOPMENT AND INVESTMENT PLC KIRIAKOU MATSI 16, AG. OMOLOGITES,1082, NICOSIA,CYPRUS

    SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC

    Key Figures	31 Dec 2014	31 Dec 2015	Change
    Total Assets (€million):	67	125	87%
    Number of income producing commercial Properties:	4	7	75%
    Operational Gearing:	48%	52%	9%
    Operating Income*(€million):	3,6	5,9	64%
    EBITDA*(€million):	0,8	2,4	3x
    Net Equity**(€million):	32,5	42,5	31%
    Issued Shares:	33.884.054	90.014.723	166%
    NAV per share (£):	0,75	0,35	-

    * Table 1- Excluding fair value related impact.

    ** Attributable to the shareholders.

    This report may contain forward-looking statements about the Company. Such statements are predictive in nature and depend upon or refer to future events or conditions and may include such words as ''expects'', ''plans'', ''anticipates'', ''believes'', ''estimates'' or other similar expressions. In addition, any statement regarding future performances, strategies, prospects, actions or plans is also a forward-looking statement. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, events, activities and achievements to differ materially from those expressed or implied by such statements. Such factors include general economic, political and market conditions, interest and foreign exchange rates, regulatory or judicial proceedings, technological change and catastrophic events. You should consider these and other factors carefully before making any investment decisions and before relying on forward-looking statements.

    1. Letter to the Shareholders

    29 June 2016

    Dear Shareholders,

    During 2015 the Company continued its growth trajectory thanks to a number of acquisitions of high yielding income producing assets in South East Europe (the "Region") resulting in a substantial increase in our Assets Under Management ("AUM"). In parallel our strategy of diversifying regionally also continued with the Company entering one more SEE country. By the end of 2015, SPDI was present in four emerging economies of SEE owning seven income producing assets in the Region.

    During the first quarter of the year in order to strengthen our acquisition capacity, the directors of SPDI offered its shareholders the opportunity to participate in a rights issue (open offer) that generated €8m new cash in March 2015. The Company used the capital raised to acquire assets, it also issued new shares for the same reason. In August 2015 we raised a further €2m of new capital through the execution of warrants bringing the total new equity raised for the year to

    €10m.

    During the year, SPDI acquired three income producing assets: a) 20% of the Autounion office building situated in a very prominent location close to the international airport of Sofia, Bulgaria, which is fully let to one of the country's largest insurance companies, Eurohold until 2027, b) the Praktiker big box retail unit in Craiova, Romania, in exchange for SPDI redeemable convertible shares, and c) 24% of the Delea Nuova office building, a well located property facing three main roads in the city center of Bucharest almost fully let with the main tenant being the country's telecommunications regulator, in exchange of SPDI ordinary shares. Together with the latter the Company acquired also a residential portfolio in Bucharest and Sofia. The three income producing assets generate a combined €2m of gross rental income.

    The macroeconomic environment in the Region and throughout Europe stabilised even further in 2015 with most of our countries of interest showing strong economic growth and signs that the property markets were picking up after years of stagnation. New international investors made their presence felt in Romania, where acquisition yields dropped across property types while transaction volumes increased. In Greece an agreement with the country's lenders, which was reached in extremis in August, followed by fresh elections that confirmed the government in place, signalled a period of lower political uncertainty. The country reached year end with a new

    €14bn recapitalisation of Greece's systemic financial institutions, the majority of which the Company has business relationships with. Ukraine experienced yet further foreign exchange destabilisation in H1, but the Hryvnia rate stabilised by Q4 offering a rare stability in the country's economy. At the same time, Europe as a whole experienced sluggish growth with the ECB expanding its QE package.